Cell surface proteins control cell-cell interactions between lymphocytes, and the regulated expression of particular surface antigens is widely utilized to delineate lymphocyte differentiation. While most cell surface proteins are expressed on the outer cell membrane directly after biosynthesis, a minority are previously synthesized proteins stored in internal vesicles that undergo exocytosis in response to activating stimuli. This process is mechistically identical to secretion via granule exocytosis, a process we have described as central to cytotoxicity, and more recently, secretion of the chemokine RANTES. In activated T cells, CTLA-4 is found in intracellular vesicles that give rise to functionally active surface CTLA-4 after T cell ligation. Previous work had suggested colocalization of intracellular CTLA-4 and perforin in activated CD8+ T cells. We examined another CTLA-4 containing lymphocyte subset, the CD4+CD25+ "Treg" suppressor cells, to see whether its intracellular storage compartment was lysosomal. When permeabilized human and mouse Tregs were costained for CTLA-4 and lysosomal markers and examined by deconvolution microscopy, no significant costaining was observed in either species. CTLA-4 also costained minimally with the endosomal marker EEA-1 and with intracellular RANTES. In mouse lymph node CD4+CD25+ cells, activation-induced CTLA-4 surface expression is rapid, and resistant to protein synthesis inhibitors for the first hour. Using Rab27a-defective ashen mice that are defective in their ability to exocytose lysosomal/cytotoxic granules after TcR crosslinking, this stimulation nevertheless triggers normal CTLA-4 surface expression in both CD8+ T cell blasts and in the CD4+CD25+ "T regulatory" cells. The Rab27a-independent exocytosis of CTLA-4 indicates that intracellular CTLA-4 in T cells is stored in a third distinct T cell compartment (in addition to the cytotoxic granules and RANTES storage vesicles) that undergoes rapid TcR-induced exocytosis. One model to explain suppression assumes that Tregs conjugated to APC express surface CTLA-4 that sequesters B7 costimulator molecules on the APC. Using confocal microscopy and a TcR transgenic mouse system, we examined antigen-specific conjugates of APC and CD4+T cells with respect to B7-2 expression, comparing the CD4+CD25+ Treg conjugates with CD4+CD25- conjugates. B7-2 was evenly distributed on unconjugated APC and in conjugates with CD4+CD25- T cells, but APC conjugated to Treg had reduced B7-2 staining over the "back" side of the cells, and clearly intensified B7-2 staining in the junctional region of the conjugate. These results suggest that APC costimulator sequestration may be one mechanism for Treg function.